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Key Takeaways
- According to surveys from Charles Schwab and Fidelity, respondents’ retirement confidence was at 67% and only 34% felt it’s “very likely” they will hit their retirement savings goals.
- The groups surveyed said they expect to need anywhere from $1.26 million to $1.6 million in retirement, close to Investopedia’s own projection from earlier this year.
Americans are growing increasingly uncertain about their retirement plans amid persistent inflation and mounting concerns about the future of Social Security.
In a trio of recent surveys from Charles Schwab, Fidelity, and Northwestern Mutual, Americans’ confidence in their ability to retire, retire comfortably, and the exact age at which different generations expect to retire varied widely. And in both the Schwab and Fidelity surveys, the number of Americans who said they’re confident in their retirement plans fell from the same surveys conducted last year.
Why This Matters To You
If you’re close to retirement age, it’s important to understand your financial situation and what a realistic retirement plan looks like for you. And if you still have several years or decades until retirement, you may have time to invest or save more to boost your retirement savings so that it is on track to grow closer to the amount you’ll need when you retire.
Retirement Confidence Is Dropping—Here’s Why Americans Are Worried
About a third (34%) of a group of 1,100 401(k) plan participants told Schwab they feel it is “very likely” they will achieve their retirement savings goals, down from 43% last year. And about two-thirds of a group of roughly 2,000 told Fidelity they’re confident in those plans, down from 74% in 2024.
About 70% of new retirees said their retirement is going about as expected, with some concerns like higher-than-expected medical costs.
About 62% told Fidelity that they have concerns that their savings will not last the rest of their lives after retiring, while about half of the U.S. adults surveyed by Northwestern Mutual said they expect to outlive their savings.
More than half of Gen Z, Millennials, and Gen X said it is very or somewhat likely that they will outlive their savings, compared to 40% of Baby Boomers.
Younger generations are the most confident. Generation Z respondents are the most likely to say they think it’s “very likely” that they’ll reach their savings goals. In the Northwestern Mutual survey, members of Gen Z said they plan to retire at age 61 on average.
Fewer Americans Believe Social Security Will Deliver in the Long Run
Many people’s concerns about outliving retirement savings have been exacerbated by growing fears about the sturdiness of programs many retirees depend on, like Social Security.
A declining number of Americans expect Social Security will be able to continue to pay benefits as expected by the time they retire. The program faces a funding shortfall that will deplete its main trust fund by 2033, limiting benefits to about 77% of their scheduled level.
Fast Fact
In the Schwab survey, respondents said they expect almost half (45%) of post-retirement income to come from 401(k) accounts, and just 18% from Social Security.
The Retirement Number: What Americans Say They’ll Need to Stop Working
The amount Americans expect they’ll need once they retire varies, from the $1.26 million in the Northwestern Mutual survey to the $1.6 million in the Schwab survey.
Workers with 401(k) plans polled by Schwab estimate their savings will last 22 years in retirement. That expectation lines up closely with Investopedia’s own projection when calculating the cost of The American Dream for this year, with survey respondents forecasting that they will need an average of $1.64 million to pay for 20 years of retirement.
